Scottish council leaders expected to seek compensation for lost poll tax payments

Scottish ministers and auditors adamant arrears should be recovered, following Alex Salmonds plan to ban pursuit of historical debts.

Scottish council leaders are expected to seek millions of pounds in compensation for lost poll tax payments after Alex Salmonds surprise move to ban councils from reclaiming arrears.

The first minister stunned council leaders on Thursday by announcing plans for a law to stop them reclaiming unpaid poll tax, after it emerged many were to use the latest electoral roll, much enlarged following the independence referendum, to pursue debtors.

A Guardian investigation has found more than a third of Scotland’s 32 councils are still pursuing poll tax debts more than 20 years after it was abolished in 1993 and replaced by the council tax. Some said the record level of voter registration – 97% of the adult population – would help that process.

The Guardian also learned that a large majority of councils plan to use the new voters roll to help pursue more recent council tax avoidance and underpayments, to check whether debtors had left previous addresses and to corroborate other databases to pursue debts.

Speaking on BBC Radio Scotland’s Morning Call on Friday, Salmond admitted he had only paid the poll tax himself after it was abolished in 1993, and said using the electoral roll to chase such old debts was immoral. “What it would do is make people frightened. It would make them afraid that by the act of coming on to the electoral register, it would make them liable for something that they did more than 20 years ago,” he said.

Fresh details have emerged about the legacy of Scotland’s mass campaign of poll tax resistance, which included activists who are now senior figures in the Scottish government, including Kenny MacAskill, the Scottish justice secretary.

MacAskill, then a defence lawyer, was leader of the Can’t Pay, Won’t Pay anti-poll tax campaign. His office confirmed on Friday he had since repaid his arrears.

Joan McAlpine, a backbench MSP and adviser to Salmond, has confirmed she refused to pay the tax and had it seized from her wages. Alex Neil, the Scottish health secretary, campaigned for people to refuse to pay, as an SNP candidate in 1989.

Scottish government data shows £425m worth of poll tax arrears including interest remains unpaid. But the amount being recovered is now a fraction of that, in part because a quarter of non-payers have died since 1993.

Legislation from 1973 also prevents debts older than 20 years from being pursued by Scottish councils, unless the debtor has already agreed to repay it or has started doing so. The arrears being repaid trickled down to £395,000 in 2013.

But David O’Neill, president of the Convention of Scottish Local Authorities, said that while he had campaigned against the poll tax 25 years ago, the money was still needed as councils struggled with cuts and rising demand.

Local government auditors and Scottish ministers had been adamant that all outstanding debts should be recovered. O’Neill said that £400,000 was roughly the kind of annual sum that councils faced losing following the ban; they would now be seeking reimbursement during budget talks with Scottish ministers.

Accusing Salmond of “government by proclamation”, after the first minister made the announcement without any consultation, O’Neill said abolishing all these debts set a dangerous precedent, making people think avoiding council charges was justifiable again.

“What Alex Salmond has just done is give succour to those people who don’t think that they need to repay their debts,” he said. “I expect this to have a negative impact on the collection of council tax now, and that’s a worry.”

The Scottish government confirmed it would hold talks on paying off outstanding poll tax repayment agreements already underway.

“Under the forthcoming legislation local authorities will no longer have the ability to require payment of poll tax arrears and their ability to recover any poll tax debt will be removed,” a spokeswoman said.

“The Scottish government will ensure that local authorities are properly compensated in line with current collection rates in respect of any outstanding amounts. Further details on when the legislation will be introduced will be made available shortly.”